[Noumenon72]

There is a set advertised price, at CarMax. I always go there. But the negotiation allows more information to pass through the transaction. Is the dealer eager to sell because this car has been sitting on the lot (they overestimated its value)? Is the buyer eager to buy because they hate comparison shopping? This way the comparison shoppers and splurgers both end up paying close to what the car is worth to them, rather than being charged some average price that leads to fewer sales to the shoppers and less profit from the splurgers.